ED Announces Trump’s Executive Order Extending Borrower Relief Will Be Automatic

By Owen Daugherty, and Hugh T. Ferguson, NASFAA Staff Reporters

The Department of Education (ED) on Friday officially announced that student loan borrowers' federal loan payments, as a part of President Donald Trump’s recent executive order, will be automatically paused through December 2020, interest free, with no opt-in request needed. 

Collections on defaulted loans will also remain halted until 2021, and non-payments will count toward Public Service Loan Forgiveness (PSLF) and income-driven repayment (IDR) progress, the department noted in a press release. Borrowers wishing to continue making payments during the suspension period will still be able to do so.

Federal Student Aid (FSA) is “working in partnership with its student loan servicers to notify borrowers of this extension of loan relief measures, and this outreach effort will continue through the fall and toward an eventual return to repayment,” the announcement reads. “FSA’s servicers are working to make these changes, and borrowers can expect to see this extension reflected in their accounts over the next several weeks.”

The notice from ED addresses some of the questions regarding implementation of the executive order, clearing up confusion regarding PSLF and IDR progress, though the timing could create an obstacle as some borrowers were already receiving notices from their loan servicers saying  their payments are scheduled to resume at the end of September.

“Thanks to President Trump’s leadership, students can continue their education and borrowers can enjoy relief from some of the financial stress many may be facing due to the coronavirus pandemic,” said Education Secretary Betsy DeVos. “We want everyone to be focused on a safe return to full-time learning. The president and I will continue to support the success of all students.”

Prior to the executive action taken by Trump or this latest announcement from ED, NASFAA had written to congressional leaders calling for student loan borrower protections enacted under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, including the suspension of payments and interest accrual, to be extended before they expire at the end of September.

While few policy differences have been resolved in the latest round of coronavirus relief talks, Congress is rapidly approaching a jam-packed legislative session in September that will require the enactment of some sort of spending measure, which could contain additional aid to student loan borrowers and the higher education community. However, negotiations on additional aid remain fluid. 


Publication Date: 8/21/2020

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